How would you advise a friend whose tenant wants to buy the house?

How would you advise your friend whose tenant wants to buy her house?

Your friend says she is looking at these options ---- and asks for your opinion

• She and her tenant will work directly to complete the sale transaction, and engage a real estate attorney or title company to handle the paperwork
• She and her tenant will have you handle the sale transaction which necessitates a pocket listing
  
• She has you represent her, and her tenant gets her own agent

There's another option.....

List it, put it on the MLS, and see if there are other buyers who may be interested in buying the property at perhaps higher price with better terms than what the tenant is willing to offer.

You look for measured words, carefully chosen so that your friend can see you sincerely want to provide good information to guide her in her decision making.

If you advise her to list, you want to avoid the perception that it's only because you want the sales commission.

Problematic and riskiest option

The biggest and perhaps the most problematic and riskiest is when the seller and buyer handle the sale on their own:

• Who sets the sales price? Sellers generally think their property’s value is higher than what the market will bear. Will buyer agree to pay more?
• Does either party have negotiating experience?
• How can the seller be sure that she provides all the disclosures required in a real estate sale transaction, and protect herself from risks of errors, omission or misrepresentation?
• How will they decide who will draw up the paperwork for the sale, and will they have individual representation or adviser when completing the contract?
• How will they handle monitoring action items and deadlines, and exacting performance from either party who fails to meet them?
• Will they know how to draft the terms and conditions as they pertain to escrow period, initial deposit, buyer investigation, appraisal and loan approval, city/county transfer taxes, point of sale compliance with local/state government ordinances, etc?

This is an open question ---- what would you do?